Multi-industrial conglomerate Textron Inc. 's TXT business unit Bell Helicopter recently secured an advanced acquisition contract from the U.S. Navy for the procurement of long-lead items and components for 27 Lot 15 AH-1Z aircraft for the Marine Corps. Work related to this deal is expected to be over by Mar 2018.
Valued at $49.1 million, this contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Textron will utilize fiscal 2017 aircraft procurement funds (Navy) to finance this deal. Work will be executed in Fort Worth and Amarillo, TX.
A Brief Note on AH-1Z jet
AH-1Z, manufactured by Bell Helicopter, is one of the world's most advanced combat choppers. With virtually identical front and rear glass cockpits, fully integrated weapons, avionics and communications systems, this copter was built to meet the expeditionary requirements of the U.S. Marine Corps.
Notably, AH-1Z's Target Sight System provides the longest range and highest accuracy of any helicopter sight in the world.
What's Favoring Textron?
Although Textron's Bell segment continues to be a drag on its top-line performance, the company's geographically diverse network of aircraft, defense & intelligence, industrial and finance businesses negates any specific business risk.
Also, at Bell segment, the company witnessed substantial progress in its V-280 Valor choppers during the fourth quarter of 2016. In terms of innovation, Textron is yet to unveil the latest one -V-247 Vigilant unmanned tiltrotor. The launch of new products, higher deliveries of H-1 model and strong foreign initiatives for its copters are expected to drive contracts for its products in 2017. The aforementioned deal seems to be one among the many contracts.
Textron outperformed the Zacks categorized Aerospace/Defense industry over the last 12 months. The company's current rate of return is 50.5%, compared to the industry's gain of 25.6%. The stock's outperformance might have been driven by Textron's systematic inorganic growth strategy, along with its focus on strengthening international presence. The company's Industrial revenues increased to $58 million, reflecting the impact of the acquired businesses. The stock's performance is in line with that of The Boeing Company BA , General Dynamics Corp. GD and Huntington Ingalls Industries, Inc. HII , which also surpassed the industry mark.
Textron currently has a Zacks Rank #5 (Strong Sell).
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